New South Wales Court of Criminal Appeal CITATION: GAFFNEY, Brendan Eamon v R [2009] NSWCCA 160 HEARING DATE(S): 7 November 2009 JUDGMENT DATE: 10 June 2009 JUDGMENT OF: McClellan CJatCL at 1; Hall J at 2; Harrison J at 3 1. Grant leave to appeal and allow the appeal. 2. Quash the sentences imposed upon the applicant by his Honour Woods DCJ on 31 August 2007. 3. In lieu thereof the applicant is sentenced to the following terms of imprisonment: DECISION: (a) On Count 1: To imprisonment for 3 years and 9 months with a non-parole period of 3 years from 31 August 2007 to 30 August 2010 and a balance of term of 9 months from 31 August 2010 to 30 May 2011. (b) On Count 8: To imprisonment for 3 years and 6 months with a non-parole period of 3 years from 31 August 2008 to 30 August 2011 and a balance of term of 6 months from 31 August 2011 to 28 February 2012. The sentence for this offence takes into account the eight additional offences on the Form 1. (c) On Counts 2, 3, 4, 5 and 6: To imprisonment for 3 years with a non-parole period of 2 years from 31 August 2010 to 30 August 2012 and a balance of term of 1 year from 31 August 2012 to 30 August 2013. (d) On Count 7: To imprisonment for 1 year and 6 months with a non-parole period of 1 year from 28 February 2011 to 27 February 2012 and a balance of term of 6 months from 28 February 2012 to 30 August 2012. Accordingly, the first date upon which the applicant will be eligible for parole is 30 August 2012. CATCHWORDS: CRIMINAL LAW – sentencing– appeal against severity of sentence – eight counts of obtain financial advantage by deception – bank officer in a position of trust involving sums in excess of $3.7M – total non-parole period of 5 years for all counts plus "global" balance of term of 3 years imposed – no facility for doing so – sentences not in accordance with principles in Pearce v R - whether manifestly excessive – applicant re-sentenced to 6 years with a non-parole period of 5 years. Crimes Act 1900 LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Criminal Appeal Act 1912 CATEGORY: Principal judgment Dunn v Regina [2007] NSWCCA 312 CASES CITED : Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 R v McDonald (1994) 71 A Crim R 370 R v Moon (2000) 117 A Crim R 497 PARTIES: Brendan Eamon Gaffney (Applicant) Regina (Respondent) FILE NUMBER(S): CCA 2007 / 4290 COUNSEL: H K Dhanji (Applicant) P W C Calvert (Respondent) SOLICITORS: S O'Connor, Solicitor for Legal Aid New South Wales (Applicant) S Kavanagh, Solicitor for Public Prosecutions (Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 07/11/0048 LOWER COURT JUDICIAL OFFICER: Woods DCJ LOWER COURT DATE OF DECISION: 31 August 2007 (date of sentence) IN THE COURT OF CRIMINAL APPEAL 2007/ 4290 McCLELLAN CJ at CL HALL J HARRISON J 10 June 2009 GAFFNEY, Brendan Eamon v R Judgment 1 McCLELLAN CJ at CL: I agree with Harrison J. 2 HALL J: I agree with Harrison J. 3 HARRISON J: The applicant pleaded guilty in the Local Court to eight offences of obtaining a financial benefit by deception contrary to s 178BA of the Crimes Act 1900. He was committed for sentence to the District Court of New South Wales. On 31 August 2007 Woods DCJ sentenced the applicant. A further eight offences - four of making and four of using a false instrument - were taken into account on a Form 1. 4 The applicant was sentenced to a term of 3 years for each offence. The sentences for counts 2, 3, 6 and 8 all commenced on the date of sentence. The sentences for counts 4 and 7 were made fully cumulative to those sentences, commencing on 31 August 2010. The sentences for counts 1 and 7 were ordered to commence 2 years into the sentences for counts 4 and 7. The total effective sentence is accordingly 8 years with a non-parole period of 5 years. Offences against s 178BA of the Crimes Act 1900 carry a maximum sentence of 5 years imprisonment. The maximum sentence for the offences listed on the Form 1 pursuant to ss 300(1) and 300(2) of that Act is imprisonment for 10 years. 5 The applicant seeks leave to appeal pursuant to s 5(1)(c) of the Criminal Appeal Act 1912 against the sentences imposed. Three grounds of appeal are identified: Ground 1 : The learned sentencing judge erred in failing to impose valid sentences in conformity with the requirements if the Crimes (Sentencing Procedure) Act 1999 ("the Act"). Ground 2 : The sentencing judge failed to sentence in accordance with Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610. Ground 3 : The sentences individually and in combination are manifestly excessive. Background 6 At the time of the commission of the offences the applicant was employed as a relationship manager for Westpac Banking Corporation. The total amount of money involved in the offences is almost $3,943,000. Westpac was the victim of the fraud. The applicant obtained the money during the period from February 2003 to January 2005. Approximately $237,000 was recovered leaving a shortfall of approximately $3.7M. The amounts involved in relation to the separate counts are referred to in agreed facts tendered on sentence. 7 The applicant's role as a relationship manager involved obtaining new lending for the bank and managing a large portfolio of business clients. The applicant's position with the bank was one of seniority and substantial trust. It is unnecessary for present purposes to describe in any detail the way in which the applicant perpetrated the frauds. 8 The sentencing judge found that the applicant had gambled unsuccessfully with most of the proceeds of the crimes on horse racing but had not retained any of the money so that at some time in the future he might have been able to gain access to it for the benefit of others in his family. He said that a major factor in sentencing those who defraud others is whether or not they are in a position of trust. His Honour found that the aggravating factors in this case included that the applicant abused such a position of trust, that the offence involved a series of criminal acts and that the offences were planned. Factors that mitigated the circumstances included the applicant's contrition and remorse, as reflected in the guilty pleas, that he was unlikely to reoffend and that he had good prospects of rehabilitation. The sentencing judge found special circumstances as the applicant had a gambling addiction requiring psychological counselling. His Honour discounted the sentences by 25 per cent for the early pleas of guilty. Grounds 1 and 2 9 The Crown conceded that his Honour would appear clearly to have failed to impose sentences in conformity with ss 44 and 45 of the Act and that he failed to impose an appropriate sentence in respect of each of the eight offences so as properly to reflect the criminality involved in each, contrary to Pearce. The Crown agreed that his Honour purported to apply the totality principle, but that he appears to have failed to evaluate the criminality reflected in each of the offences in as much as he did not differentiate between the sentences imposed. This was so even though the offences involved sums varying between $50,000 at the low end and $1.84M at the high end with a median amount involved of approximately $500,000. 10 The applicant emphasised that his Honour did not set individual non-parole periods in relation to any of the offences. His Honour gave no reasons for this approach. However, that alone did not invalidate the sentences: see s 45(4) of the Act. Commencement dates were not specifically stated although it seems apparent that to the extent that some sentences were expressly stated to be cumulative upon certain others, his Honour's views were made clear. Moreover, an isolated failure to specify a commencement date does not in any event invalidate the sentence: see s 48(3) of the Act. His Honour purported to set a single non-parole period of 5 years. This was longer than any one of the individual sentences imposed. The applicant contended that there was no facility to do so. Nor does the Act contemplate the setting of a "global" non-parole period. 11 The applicant therefore contended that the sentence that his Honour apparently intended to impose could not be translated into a sentence in conformity with the Act. In other words, if his Honour properly imposed fixed terms of 3 years for the first group of offences, he could then have imposed terms with a non-parole period of 2 years and a balance of term of 1 year for the second group of offences. That would have produced a sentence with an effective non-parole period of 5 years with a balance of term of 1 year. However, this would have meant that the third group of offences would have needed to be sentences of 3 years with no non-parole period. The applicant submitted that the imposition of such a sentence was not possible under the Act. 12 As a result the applicant submitted that his Honour erred in failing to impose valid sentences in conformity with the requirements of the Act. As I have indicated, the Crown accepted that contention. Neither party proceeded to make any affirmative submissions on the significant issue of what, if anything should occur in these circumstances. 13 However, it follows from this that the applicant will have to be re-sentenced. In my opinion it is appropriate for this Court to re-sentence the applicant. Ground 3 14 By reason of the success of the first two grounds of appeal, and the corresponding need to re-sentence the applicant, consideration of the third ground of appeal acquires a certain artificiality. The sentencing exercise in this Court must be undertaken afresh having regard to the accepted conclusion that the original sentences that were imposed were contrary to law. However, quite apart from the difficulties that led to that result, the effective period of imprisonment that his Honour intended to impose was clearly a non-parole period of 5 years imprisonment with a balance of term of 3 years. The thrust of the applicant's submission must therefore be taken to be that upon a re-sentence by this Court, any sentence that approaches or equates to a similar result but which is imposed according to proper principles would nevertheless remain manifestly excessive. 15 The applicant conceded that the offences were serious. They were acknowledged by him to involve significant breaches of trust. Some of the offences took place over a period of time. The total offending took place over a period of two years. 16 The sentencing judge allowed a discount of 25 per cent for the utilitarian value of the applicant's pleas of guilty. His Honour's approach suggests a starting point of 4 years for each offence having regard to the uniform imposition of 3-year terms for each offence. However, by way of example, the applicant draws attention to the dissimilarity between the circumstances of count 7, an offence involving $50,000 and committed over a relatively short period of time for which his Honour purported to impose the same non-parole period as he did for count 1 involving approximately $1.84M. Count 8 involved the sum of $500,000. Counts 2 to 6 involved amounts ranging from $180,000 to $473,000. 17 The applicant submitted that a total sentence of 8 years with a non-parole period of 5 years should be seen in the light of the fact that, in some cases, "it is the fact of imprisonment rather than the length of the sentence which will be of greatest significance to punish the offender and denounce his conduct": see R v Moon (2000) 117 A Crim R 497. In R v McDonald (1994) 71 A Crim R 370, in the context of a gaol sentence imposed in relation to fraud offences, Burchett and Higgins JJ, with whom Spender J agreed, said at 379, "[i]n a case of this kind, a first incarceration may have a very salutary effect, and the prospect that it may do so should not be left out of account when its length is fixed." 18 The applicant contended that the Crown submitted at first instance that the matters did not require a non-parole period "significantly higher" than three years. In fact, the Crown submitted, when asked specifically to comment upon a non-parole period of three years, that "[i]t should be higher than that, whether it's significantly higher than that is a matter for your Honour". The Crown submitted that it did not bind the sentencing judge in any event, a contention that I did not understand to be contested by the applicant. Either way, whether or not what was said amounted to a concession by the Crown in the court below, the applicant embraced it as an appropriate approach in this Court. The applicant also submitted that a non-parole period of 5 years was manifestly excessive in the circumstances of this case. 19 In contrast, the Crown submitted in this Court that it was open to his Honour "to impose the overall sentence" and that no error had been established by the applicant as to the overall sentence that was imposed. Alternatively, the Crown submitted that the appeal against sentence should in any event be dismissed on the basis that no less severe sentence is warranted in law having regard to s 6(3) of the Criminal Appeal Act 1912. 20 In my opinion the failure by his Honour to distinguish between or among the various counts, and to impose an identical non-parole period in each case, notwithstanding their significant differences, is an error but not one that has led to the imposition of an effective non-parole period that is excessive. In performing the re-sentencing exercise that is called for, I consider that a lesser sentence is warranted in law, but only to the extent that the statutory ratio should be varied, with the head sentence of 8 years reduced to 6 years and the effective non-parole period of 5 years remaining the same. In this respect I have had regard to what was said by Hoeben J in Dunn v Regina [2007] NSWCCA 312 at [40] – [41] as follows: "[40] The submission in relation to s44 is, however, in a somewhat different category. I appreciate that the section does not create a statutory norm in relation to the proportion of the non-parole period as against the total term of the sentence and that special circumstances are required only where the proportion is to be less than three quarters. Nevertheless general sentencing principles suggest that where there is a departure from the statutory ratio there should be some reason provided. It is not clear here that his Honour appreciated that the combined effect of the sentences was to produce a non-parole period in excess of 80% of the head sentence. If he did he failed to indicate why he thought such a departure from the statutory ratio was appropriate. [41] It has been held by this Court that where one or more sentences are made cumulative upon another sentence so as to produce a non-parole period which is in excess of the statutory ratio that of itself may amount to special circumstances. On the facts of this case that consideration and the absence of an explanation as to why the non-parole period has been increased beyond the statutory ratio, lead me to conclude that this Court ought intervene so that the combined effect of the sentences conforms with the statutory ratio. A reduction of 4 months in the non-parole period in respect of count 3 would substantially achieve that result." 21 Count 1 was arguably the most serious offence. It took place over a period of 22 months and involved the sum of $1.844M. That is to be compared with the sum of approximately $3.7M, which is the total of the bank's unrecovered loss. It alone warranted a significant term of imprisonment. 22 Count 8 was in monetary terms the next most significant offence. It was perpetrated over a period of only three and a half weeks but involved a loss to the bank of $500,000. It was the second most significant offence in monetary terms and in my opinion is deserving of specific treatment for that reason. Alike with Count 1 in particular, it is important that it be specifically marked out as a single offence with a sentence that will operate to deter individuals in positions of trust who have the opportunity or the inclination to defraud those who have their confidence and are vulnerable to its abuse. 23 His Honour was inclined to group others of the offences on bases that were unexceptionable and which were related to the identities of the clients of the bank in respect of whose accounts the frauds were committed. In my opinion the sums involved in Counts 2, 3, 4, 5 and 6 suggest that they are capable of being treated together for sentencing purposes. Counts 2, 3 and 6 all relate to offences committed in respect of the accounts of one particular customer of the bank, as detailed by his Honour. Counts 4 and 7 related to companies, rather than individuals, and his Honour's approach was to treat them together for that reason. I consider that Count 7 ought to be treated separately by reason of the fact that the sum involved is considerably less than that involved in any of the other counts, and in order that reference to it in context does not fail to distinguish it from those offences involving significantly larger sums, for which longer sentences are warranted. 24 The effect of the sentences that I propose is that the applicant will still be required to serve a period of 5 years from 31 August 2007 until he becomes eligible for parole on 30 August 2012, but with the balance of his parole periods expiring on 30 August 2013 instead of 30 August 2015. In the particular circumstances of this applicant I do not consider that an extended period of supervision on parole is warranted or necessary. The special circumstances found by the learned sentencing judge, being the applicant's gambling addiction and his need for appropriate counselling, are matters than can be suitably attended to during the term of his non-parole period and the further single year on parole. The total effective sentence is accordingly 6 years with a non-parole period of 5 years. Orders 25 In my opinion the following orders should be made: 1. Grant leave to appeal and allow the appeal. 2. Quash the sentences imposed upon the applicant by his Honour Woods DCJ on 31 August 2007. 3. In lieu thereof the applicant is sentenced to the following terms of imprisonment: (a) On Count 1 : To imprisonment for 3 years and 9 months with a non-parole period of 3 years from 31 August 2007 to 30 August 2010 and a balance of term of 9 months from 31 August 2010 to 30 May 2011. (b) On Count 8 : To imprisonment for 3 years and 6 months with a non-parole period of 3 years from 31 August 2008 to 30 August 2011 and a balance of term of 6 months from 31 August 2011 to 28 February 2012. The sentence for this offence takes into account the eight additional offences on the Form 1. (c) On Counts 2, 3, 4, 5 and 6 : To imprisonment for 3 years with a non-parole period of 2 years from 31 August 2010 to 30 August 2012 and a balance of term of 1 year from 31 August 2012 to 30 August 2013. (d) On Count 7 : To imprisonment for 1 year and 6 months with a non-parole period of 1 year from 28 February 2011 to 27 February 2012 and a balance of term of 6 months from 28 February 2012 to 30 August 2012. Accordingly, the first date upon which the applicant will be eligible for parole is 30 August 2012. ************* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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